How Much Do Uber Drivers Make? Is It Worth Your Time?
A day to yourself on the open road sounds pretty good: no boss to interrupt your break and no co-workers to tell you to turn down your music. But is driving for Uber the freeing, profitable gig it’s made out to be?
Gig work is a continually growing field of contract workers looking for side hustles or freedom from the 9-5 grind. Yet how much do Uber drivers make? Is it worth your time to pick up some rideshare work?
2021 Uber Stats
Learning the Uber platform’s viability as a business opportunity before committing to it as a driver is an important first step. So, how is Uber doing in 2021?
In the 11 years since its founding, Uber has expanded into over 70 countries. Around 3.5 million drivers serve 93 million customers. Together, they take 1.44 billion rides each fiscal quarter.
Compared to other rideshare options like Lyft, Uber leads the pack with 68% of the industry’s rides completed through its app.
Though 2020’s statistics show a decline in regular riders, this is most likely due to the COVID-19 pandemic. Uber is already seeing a rebound in rides and will likely follow the overall trend of 2014 through 2019, which saw an almost 50% increase in riders.
Given its lock on the market and steady projected growth, Uber will undoubtedly continue to prosper as a company. But does that translate into an equal opportunity for each new Uber driver?
Location and Demand
Unfortunately, these stats do not bode well for many Uber drivers based simply on location and demand. Of the 10,000 international cities that Uber is present in, five accounts for nearly a quarter of its rides — 22%. These cities are London, São Paulo, Chicago, Los Angeles and NYC.
An Uber drivers’ pay is based entirely on how many rides they book and complete. Being in an ideal location can vastly increase pay, whereas a rural Uber driver would generate significantly less income.
How Much Do Uber Drivers Actually Make?
Uber’s pay structure factors in several variables: base fares, tips and other incentives. Calculating a realistic average is difficult. However, according to recent studies, most Uber drivers earn just over $9 per hour.
Uber Driver Percentile Pay by Location
The following data shows the percentile distributions of Uber driver earnings in several different locations. Note that median earnings appear in the 50% column.
|New York City||$29,665||$36,402||$43,802||$53,502||$62,333|
Uber’s Pay Structure
Uber’s pay structure is dynamic and flexible. It is calculated according to location, time of day and frequency of work. Pay may vary on a day-to-day basis.
Uber provides “earnings estimates” instead of a set wage to help drivers identify their likely profits. These should be viewed strictly as projections. They are based on what other drivers working the same hours in the same location earned over the previous month.
Uber drivers earn from a combination of factors including tips and trip fares. Occasionally things like Quest promotions may lead to additional earnings.
What Is a Base Fare?
The base fare is the flat rate that a pick-up pays. Time and distance increase the trip fare.
Does Surge Pricing Affect Drivers?
Uber uses surge pricing when demand is high, increasing the costs of rides. Uber drivers can use a local map to find surge prices and time their availability. This can increase earnings.
Drivers are protected if a ride is canceled while they are en route to pick-up. They will receive a cancellation fee.
What About Uber Eats?
Uber rideshare drivers also have the option to deliver orders through Uber Eats. This entails opting in, accepting delivery orders and then transporting food and beverages to customers.
Choosing to deliver food can boost an Uber driver’s pay, especially on days when rides are slow. Uber encourages its drivers to diversify their payment options, depending on demand.
Uber Eats pays drivers a delivery fare based on pick-up, drop-off and distance. There is also a similar surge pricing for food delivery known as “Boost” that will increase pay at certain times of the day.
Gross vs. Net Income
Several significant deductions will reduce the amount that Uber drivers net. These are important to consider when considering gross versus net income as a driver.
Uber drivers are contract, or 1099, workers. This entails they work on their own schedule with their own supplies. Drivers are responsible for all vehicle maintenance, gas and insurance compliance.
As contract workers, income taxes are not withheld from pay. Drivers must remember that they owe taxes on the pay they receive from Uber. Not only do they need to calculate their income taxes, but they must also pay a self-employment tax if they make more than $400 per year as a 1099 contractor.
The self-employment tax is 15.3% and covers both the Medicare and Social Security tax contributions that both employee and employer pay in a typical job . Since Uber drivers are self-employed, they must pay 7.65%–half of the 15.3% total–more than they would as regular W-2 employees.
A “Shortage” of Uber Drivers
Recent talk of a “shortage” of Uber drivers may bode well for those looking to pick up some rideshare gig work. Here, again, understanding the fine print and variables is important.
At the end of 2019, there were 5 million Uber drivers. Today, that number has dropped to 3.5 million, a 40% decrease.
Fewer drivers result in increased costs for riders. As more people are looking to get back on the road post-COVID-19 restrictions, they’re finding wait times and prices that reflect the shortage of drivers.
In April of 2021, Uber developed an incentive program number of $250 million to get drivers back on the app. This, combined with increased fares due to scarcity, means drivers are seeing better financial opportunities than before. In large cities like New York, Philadelphia and Chicago, drivers are making over $30 per hour.
However, this temporary demand imbalance combined with Uber’s dynamic pricing structure suggests this pay increase is likely an unusual exception, not the rule. Those signing up as drivers now can make good money, but they should do so with an end date in mind.
Good To Know
The average car insurance will not cover a vehicle used for rideshare work. Uber provides insurance that covers drivers while they are waiting for a request, en route to pick-up or during a ride. To protect yourself when you use your vehicle for Uber, be sure to sign up for a rideshare auto insurance policy.
Doing Uber the Right Way
Due to the wide variability of pay as an Uber driver, managing expectations based on opportunities is essential. Optimizing Uber work can maximize your income, but it hinges on the opportunity for rides and deliveries in the area where you drive.
Uber Driver FAQHere are the answers to some of the most frequently asked questions about becoming an Uber driver.
- Can you make $500 a day with Uber?
- Technically, a driver could make $500 in a day with Uber--if everything fell into place. Currently, some drivers in big cities are making close to $50 an hour due to a good strategy and a driver shortage. If they work 10-hour days, they could certainly reach $500.
- How much do Uber drivers make working 20 hours per week?
- Uber's average pay to drivers seems to hover around $9-10. Average Uber drivers working 20 hours per week would make just under $200.
- Is being an Uber driver worth it?
- Being an Uber driver is worth it if you approach the gig with the right expectations. It is certainly worth it in large cities where you can make a fair wage due to demand and availability of rides. It may also be worth it in less populous areas for those just looking for a side hustle.
- Does Uber pay for gas?
- Uber does not pay for gas, maintenance, insurance--besides the coverage they provide--or other associated costs with driving. As an independent contractor, you are responsible for maintaining the equipment you use for work.
Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.
- CBS News. 2020. "Uber Says Its Drivers Make $55,000 a Year, but Some Critics Cry "Phoney-Baloney.""
- Uber. "How Much Can Drivers Make With Uber?"
- SmartAsset. 2021. "Self-Employment Tax: Everything You Need to Know."
- The Washington Post. 2021. "Where Have All the Uber and Lyft Drivers Gone?"
- Forbes. 2021. "Navigating Auto Insurance For Delivery Drivers."
- IRS. "Independent Contractor (Self-Employed) or Employee?"